On marketing.

Kellogg Price Hike Goes With Grain

Think you've been paying too much for your breakfast cereal? You might be paying more, and fairly soon.

Cereal champ Kellogg Co. Tuesday disclosed it is bumping up the U.S. prices on its ready-to-eat cereal products an average of 3.2 percent, an action that was effective Jan. 2.

This is Kellogg's fourth increase in four years, and each time its competitors have followed suit, with manufacturer price hikes being passed on in each instance by supermarket chains.

So, while other cereal firms such as General Mills, Quaker Oats, Kraft General Foods (which just completed a buyout of Nabisco's Shredded Wheat) and Ralston Purina didn't immediately match Kellogg's increase, they almost certainly will do so in the near future, perhaps as early as the end of this week or within a month.

Quaker said it was studying Kellogg's price increase. General Mills, with a near 30 percent share of the market and strongly challenging Kellogg, declined to comment. Kellogg has a category-leading 37 percent share.

As in previous cases, Kellogg cited "overall increases in business expenses" for hiking the price. It was only last May that Kellogg boosted its prices by 3.5 percent. Kellogg said the price increases affect most but not all of its cereals, which are headed by Corn Flakes and Frosted Flakes.

During the last price go-around, cereal firms appeared to pump more promotional bucks, including coupons, into the market as a means of lessening the impact at retail.

About half of all ready-to-eat cereal purchases include a coupon; a current free-standing insert in newspapers offers $1.50 off on milk bought with a cereal purchase.

While final figures for 1992 still are being tabulated, it appears cereals increased in units and dollars. For 1991, total cold-cereal sales rose 8 percent to $7.8 billion and tonnage climbed 3.7 percent to 2.71 billion pounds, according to analyst John C. "Jack" Maxwell Jr., of Richmond, Va.-based Wheat, First Securities.

Burchill becomes Petry boss

Petry Inc., one of the top three television representative firms, is getting a new boss. Named president-CEO of Manhattan-based Petry is Thomas F. Burchill, who had been president and CEO of Hearst/ABC-Viacom Entertainment Services in New York, the joint venture that runs the Lifetime cable channels. Burchill, 50, whose background includes management and sales stints at several rep firms including his own as well as Petry in the past, told this column Tuesday he had acquired a "substantial equity" in Petry. He said it involved cash, but declined to be specific. Burchill said he is the principal investor heading an outside group, and that he is the only person taking a management position. "It's a good personal opportunity for me," he said. Sources said Burchill's equity position probably tops $50 million. David Allen, 62, who had been chairman, president and CEO of privately held Petry, remains chairman. Burchill appears to have acquired most of Allen's equity. Allen for some time reportedly has been trying to sell most of his stake in the company. Petry reps 114 stations including WFLD in the Chicago market where the rep firm also has an office. The Hearst-ABC-Viacom joint venture didn't immediately announce a replacement for Burchill, but sources pointed to Douglas McCormick, group VP of the parent and executive VP of Lifetime as the likely new boss.

In a bid to attract more national advertising dollars, the Tribune Co.'s seven newspapers are offering clients an opportunity to buy space in two or more of them as part of a network buy. This concept "makes it simpler for advertisers who do business in several Tribune Co. markets," said Jerry McCarthy, the Chicago Tribune's director of general advertising and recently named head of Tribune Newspaper Network. McCarthy is heading the latter unit in New York. Already there has been some testing of the network, and in March TWA bought an advertising package in five newspapers, including the Chicago Tribune, the Ft. Lauderdale Sun-Sentinel and The Orlando Sentinel.

BBDO Chicago's Bob Bailey becomes the agency's second recipient of the annual BBDO Founders' award recognizing achievement and service. Bailey, a 20-year veteran of BBDO and its predecessor agency Arthur Meyerhoff Associates, is executive VP and director of marketing services. Bailey is picking up 100 shares of the parent publicly held Omnicom Group's stock currently worth $4,050.